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August 7, 2011

S&P500 Technical Analysis Update: August 7, 2011.

Our new SATS5 short position last week came just in time. We made a paper profit of about 7% in one week. That would bring the total profit to 52.6%. Large moves in a very short time are always a good opportunity to take profit. I am not doing this here because we follow purely the SATS5 expert signals.

The index reached a historical 261.8% Fibonacci projection at 1170. Indicators are oversold. I am expecting some consolidation for next week, probably with a move back up to 1240-1250 short term.

Elliott wave count:Looking at the long term Elliott count, a first possibility is that we are in the making of a long term wave [3] up (not {C} [B] as shown in the chart). This looks like a very optimistic long term view, most probably to good to be true!Another possibility is that the index finished a long term correction wave [C] down, next started and finished a new long term wave [1] up and now making correction wave [2]. An optimistic view since the correction will be limited.Or a third possibility is that we completed a long term correction wave [A] down, that we finished long term correction wave [B] up and now followed by long term correction wave [C] down. This would be the worst case scenario with an index target below 650.

Pitchfork:The index fell out of the lower side of the up moving blue pitchfork and is closing now at the low side of the red downward pitchfork.

Fibonacci:The index reached exactly the 261.8% target of an historical projection started from between wave (5) and wave (4).

Support/Resistance:There is support at 1170 and 1130. There is resistance at 1250-1260, 1300, 1350.

Indicators:Indicators are moving down into oversold area.

SVE_ARSI (14 periods) indicator:Moving down.

Slow Stochastic:Moving down.

SVE_RSI_Swing:Moving down.

SVAPO:Moving down.

Volume:High on down days.

SVE_BB%b_HA (18 periods):Moving down.

SVE_Inv_Fish_Stoch:Moving down.

SATS5 Expert:The SATS5 expert is black, there is an open short position. History of all trades is shown at the bottom of this page.